Valuable patents possess commercial value and are enforceable. The commercial value of a patented technology is based on the revenue it can generate for a business through its application or licensing. Patent enforcement is measured by evaluating the effectiveness and outcomes of actions taken to uphold a patent holder’s rights against unauthorized use, infringement, or violation of their patent.  Unfortunately, most patents lack commercial value either because a) the inventions themselves are worthless, or b) the inventions have commercial value, but the patents are legally compromised.

The current average cost for a US patent is $50,000. If patent return on investment (ROI) matters to you, consider a Patent Checkup. Click REQUEST A CHECKUP, send us your patent/s and we will return your Patent Rating results. There is no charge or registration required.

Our Approach

Patent valuation uses an “A” through “D” rating scale. A-rated patents represent the highest value, B-rated patents have medium value, C-rated patents have low value, and D-rated patents are unlikely to have any value. The checkup further distinguishes Commercial Value (CV) and Enforcement Value (EV). Both are measured independently, described as follows.

Commercial Value

Commercial Value represents the value of a patent in the context of its utility in commercial or business activities. It is based on the revenue it can generate for a business through its application or licensing. A granted patent is no guarantee that the invention has commercial value, in fact most patents will never achieve significant commercial relevance. Licensees and buyers often need to be certain that a patent can support a revenue-generating licensing program. They consider who is using the patented technology, whether the technology generates profits and/or reduces costs, how much revenue the products generate and how much the patented technology contributes to that profit generation. Business Value is expressed as a decimal value on a scale from 0-1 with 1 representing the highest score.

Enforcement Value

Enforcement value is a measure of the effectiveness of actions taken to uphold a patent holder’s rights against unauthorized use, infringement, or violation of their patent. It measures the success in negotiating licensing agreements with infringing parties and financial compensation received through settlements before or during litigation. The value highly depends on the way claims were written and their ability to stand up to legal scrutiny. Claim language should be explicitly supported within the specification, written to be understood by persons of ordinary skill and – probably most important – be supportable. Simply stated if one cannot demonstrate that someone is practicing all elements of an issued claim, there is no case to assert the patent. Evidence of use (EOU) in the form of a detailed claim chart offers concrete evidence that a patented invention is being used in a product and shows how the claim is being infringed (see Custom Services). Licensees and buyers often base their decision on the presence of strong EOU. Regardless of an invention’s Commercial Value, without sufficient Enforcement Value the overall value of the patent is significantly diminished. Inventions are knowingly being infringed all the time because enforcement is either too difficult or cannot be economically justified. Enforcement Value is expressed as a decimal value on a scale from 0-1 with 1 representing the highest score.

Patents are rated according to Commercial Value and Enforcement Value. Each is individually scored and combined to produce the Patent Rating. Checkup analyzes each patent claim and the final Patent Rating is determined by the independent claim with the highest combined score. Having Commercial Value and Enforcement Value measured separately is particularly useful when analyzing a sizeable portfolio of patents (see Portfolio). Patents can be prioritized according to business goals; for example, patents with the highest Enforcement Value could be prioritized for licensing, and patents with the highest Commercial Value could be prioritized for valuation purposes (see Custom Services).

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If you have any questions or need more information about Patent Valuation, please contact us.